CO PLANS TO RAISE UP TO Rs 15K CR VIA TRUST - IRB Infra Plans Trust for Projects:The Economic Times

IRB Infrastructure Developers has decided to transfer 12-15 of its operational projects into a trust and raise about `. 15,000 crore of long-term capital through it, according to its chairman and MD Virendra Mhaiskar.

An infrastructure trust offers project promoters an opportunity to sell stake in completed projects to the trust, which in turn can raise long-term and tax-free funds from unit holders.

“We believe that transferring 12-15 of our operational projects to the trust will help us free substantial capital to invest in other projects,“ Mhaiskar told ET.“We hope to get all the approvals in place soon so that we can launch the trust before the end of the current fiscal.“ IRB Infrastructure, a project development and construction company , has a portfolio of 23 build-operate-transfer road projects, of which 15 are already operational and generating revenue.

“Ours would probably be the first in frastructure trust. Many infrastructure companies are keen to launch these trusts but for the trust to be able to raise funds, the projects should offer a yield of at least 910%, which may be a problem for many infrastructure companies,“ Mhaiskar said.

IRB Infrastructure aims to hold 25% stake in the trust and sell the balance as units to long-term investors. Of the funds raised, `. 8,000 crore would be used to repay debt of projects under the trust, while about `. 4,000 crore will be available to IRB Infrastructure for investment in fresh projects. The company's board has approved the plan and it will now seek shareholders' approval.

On Thursday, the company reported a 20% year-on-year rise in first-quarter net profit to ` . 166 crore. Total income in the quarter rose 12% from a year ago to . 1,137 crore.` “The first quarter saw good growth in traffic volume, which has helped our earnings. We expect traffic growth to continue,“ Mhaiskar said.

The company said its order book now stands at around ` . 12,100 crore, out of which ` . 10,270 crore worth of order book is to be executed in the next threefour years.